Meta Fined Rs. 213 Crore for WhatsApp Policy Violations by CCI

Meta faces a Rs. 213 crore penalty by the Competition Commission of India for exploiting its dominant position with WhatsApp's 2021 Privacy Policy. The CCI demands behavioral remedies and prohibits user data sharing for advertising for five years, highlighting anti-competitive practices and market dominance exploitation.

The Competition Commission of India (CCI) has levied a substantial fine of Rs. 213.14 crore on Meta Platforms for what has been deemed an abuse of its dominant position. The case centers on the contentious rollout of WhatsApp's 2021 Privacy Policy, which entailed controversial data collection and sharing with other Meta entities.

In addition to the financial penalty, CCI has issued a cease-and-desist order and set forth several behavioral remedies to be executed within a specified time frame. The commission's investigation identified two critical markets: the market for over-the-top (OTT) messaging apps and the online display advertising market in India.

The commission determined that WhatsApp, managed by Meta, holds a dominant position in the OTT messaging app sector in India. Similarly, Meta is a leading player in the online display advertising domain compared to its competitors. In January 2021, WhatsApp updated its terms of service and privacy policy, informing users through in-app prompts.

The new policy, effective from February 8, 2021, required users to accept expanded data collection terms, including mandatory data sharing with Meta companies. Unlike the 2016 policy, which gave users the option to opt out, the 2021 update removed this choice, forcing users to comply or lose access to WhatsApp.

The CCI judged this 'take-it-or-leave-it' policy to be an unfair condition under the Competition Act, as it forced compliance with expanded data collection, undermining user autonomy. Given WhatsApp's network effects and the absence of viable alternatives, this constituted an abuse of Meta's dominant position, violating Section 4(2)(a)(i) of the Act.

The CCI also underscored anti-competitive practices stemming from the data sharing with Meta entities. Sharing WhatsApp user information with other Meta companies for non-service purposes erects significant barriers for competitors, in breach of Section 4(2)(c) of the Act.

Meta's dominance in the OTT messaging market was used to bolster its position in the online ad landscape, in violation of Section 4(2)(e) of the Act. To mitigate these anti-competitive concerns, the CCI mandated several measures for Meta and WhatsApp.

WhatsApp is barred from sharing platform-collected user data with Meta companies for advertising for a five-year span. Post this period, specific regulations will govern such data sharing. WhatsApp must clearly outline the types of user data shared with Meta entities and their purposes.

Data sharing not related to WhatsApp services cannot be a condition for app usage in India, and all users should receive an opt-out feature via a prominent in-app notification.

Users must have the ability to review and modify their data sharing preferences through an explicit app settings tab. Future policy amendments must adhere to these stipulations. (ANI)

(With inputs from agencies.)